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Investing in Moscow region

The region of Moscow offers a tremendous investment opportunity for both national and foreign investors. Moscow has a well-established procedure of preparing, submitting and implementing investment projects involving the participation of foreign capital. The investment policy of the Moscow government strives to create favourable and optimum condition for foreign investors to function.

Currently, some of the most attractive sectors for investment in Moscow are metal working, machine engineering, automotive and food industries, electric power, transport and communications, commerce and catering and insurance.

Advanced and long term developments in different fields of Science and Technology, including microbiology, nanotechnologies and pharmaceutics have made them an attractive prospect for foreign investors. The economy of the Moscow region focuses on innovation-based development and this offers wide business prospects to foreign businesspersons.

Projects related to development of business infrastructure, including construction of business centres and shopping malls are also of keen interest. Development of real estate, tourism and hotel business markets are considered to be the key line of activity of the city.

The prominent and dominant factors behind the effectiveness of implementation of all the investment projects in the region are:

  • Creation of new jobs for the local population
  • Return of investment within a specific time-period
  • Improvement of security, ecological safety of the region
  • Improved architectural appearance of the region
  • Bright future prospects of the region

Taxation on FDI:

The general tax rules for FDI in Russia are set by the RF Tax Code, other local and federal laws and by-law acts of tax authorities and Russian federal finance. The comprehensive list of local, regional and federal taxes currently in effect is explained in the Chapter 2 Section 1 Part 2 of the Russian Federation’s tax code and Articles 18-21 of the Federal Law on Fundamentals of Tax System in the RF of 27 December 1991 No. 2118-1. The most important and sensitive taxes, include excise taxes, custom duties, profits and income taxes and value added tax. Payroll taxes and payments, including employment fund and medical insurance contributions, pension fund and social security number are some more significant fiscal costs associated with doing business in the Moscow region.

Real estate and other fixed assets associated with foreign entities also invite tax on assets located on the RF. The tax rate for this is not more than 2.2 percent.

Foreign investors can also enjoy some tax exemptions. For instance, foreign investors importing capital goods (technological equipment) into the RF in the form of a capital contribution to businesses won’t need to VAT and customs duty, if they aren’t subject to excise taxes.

 Regulations and Restrictions:

Following are some important regulations and restrictions laid down by the Russian government:

  • Foreign investors are allowed to tie-up with or include domestic commercial organizations in any form furnished by national legislation.
  • Foreign investors are legally authorized to open branch offices.
  • Prominent construction projects, involving foreign investments, of national importance are subject to the state expert examination.
  • Prominent renovation projects or construction work carried out by companies, involving foreign investments, are subject to ecological audit if they can have any negative impact on the environment.

Due to these attractive features, Moscow has proved to be a safe investment place for investors worldwide. The faith that foreign countries have in the Moscow region can be gauged from the fact that the region has permanent business relations with more than 100 countries.

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